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Sonicblue Cuts 25% of Staff,
Including Technology Chief

A Wall Street Journal Online NEWS ROUNDUP

Updated Sept. 6, 2002 12:01 a.m. ET

Sonicblue Inc.,
in its latest corporate shake-up, said it is laying off 25% of its staff, including executives in charge of sales and technology, and consolidate most operations into its Santa Clara, Calif., headquarters.

In a press release Thursday, the consumer-electronics company said the job cuts will include Roger Hackett, senior vice president of sales, and Andy Wolfe, who has been chief technology officer since May 1999.

The consumer-electronics company said the layoffs and consolidation will be completed by year end. About 100 of Sonicblue's 400 employees are being laid off. In addition, Sonicblue will consolidate certain functions currently located in Scottsdale, Ariz., and Tigard, Ore., into its Santa Clara facility.

"This was a difficult decision for everyone involved, but is an important step in our drive towards improved financial performance," said Greg Ballard, SonicBlue's interim chief executive officer, in a prepared statement.

SonicBlue, Santa Clara, Calif., is the maker of the ReplayTV 4000, a digital-video recording device at the heart of a growing legal controversy.

The restructuring is the latest chapter in Sonicblue's recently turbulent history. The company has suffered in the tech recession, reporting quarterly net losses. Last month, Sonicblue fired Kenneth Potashner as chairman and chief executive, after he said he had a dispute with the Sonicblue board.

The former chief executive said he had called for the resignation of three Sonicblue board members over repayment of company loans totaling nearly $600,000. However, the company said his termination had nothing to do with his allegations.

The company named L. Gregory Ballard, an executive vice president for marketing and product management, to succeed Mr. Potashner.

The company's stock closed at 32 cents Thursday in Nasdaq Stock Market trading, unchanged from Wednesday but down from its 52-week high of $5.49.

SonicBlue has been the target of heavy legal maneuvering by major television and movie studios, which have claimed that ReplayTV's abilities to shut off commercials and to transmit recorded programs via the Internet are endangering its advertising and subscription revenues.

The company said it will hold a conference call Friday morning to review business strategy and its quarterly forecast.